Stock market today: Dow, S&P 500, Nasdaq futures trade muted with Fed rate cut seen as done deal
Despite notable tariff-fed jumps in prices, the Fed is preparing to cut rates next week. Jerome Powell has signaled it. Markets are pricing it in. And the reason isn’t inflation. It’s jobs, Yahoo Finance’s Allie Canal says in today’s Morning Brief.
Allie reports:
Suddenly, the “solid” economy Fed officials were touting just months ago doesn’t look so solid anymore.
For Powell & Co., this creates a tricky balancing act. Move too soon (or too much), and policymakers risk fueling inflation just as tariffs push prices higher. Act too slowly (or not enough), and cracks in the labor market could deepen, tipping the economy closer to recession — the dreaded stagflation mix.
It’s a delicate dance and history shows the Fed doesn’t always get the timing right — as President Trump frequently likes to remind our Fed chair.
Investors are split on how to read it — if you ask them. Retail sentiment looks downright gloomy. Just 28% of investors called themselves bullish in the latest AAII survey, while nearly 50% are bearish, the most pessimistic reading since the April tariff announcements.
On the other hand, if you don’t ask them but watch them, investors have handed the market yet another series of record highs. …
In other words, Main Street could be bracing for more pain, while Wall Street’s positioning still looks stretched.